The Hindu Business Line : Good demand, higher prices boost India Cements Q3 net

India Cements Ltd continued its buoyant growth in 2007-08 with its net profit and turnover growing at nearly 60 per cent during the third quarter compared to the corresponding period of the previous year.

The buoyancy in cement prices with demand outstripping supply has contributed to the performance. The company has also kept a tight rein on costs despite the growth in fuel prices. In the nine months of the current year, the company has exceeded its entire year’s performance in 2006-07. The results of the current year also include that of Visaka Cement that was merged with India Cements with effect from July 1, 2006.

At a press conference here today, the company’s Vice-Chairman and Managing Director, Mr N. Srinivasan, said that cement prices continued to remain stable during the third quarter during which there is a usually a dip. Demand continues to exceed supply and manufacturing units were running to capacity. Gross realisation was Rs 3,914 a tonne in the third quarter up from Rs 3,909 in the second.

During the nine months ended December 31, 2007, the company has reported a 72 per cent growth in net profit of Rs 53.310 crore on net sales of Rs 2,576.37 crore. During the corresponding period of the previous year, the company reported a net profit of Rs 309.69 crore on net sales of Rs 1,694.70 crore.

India Cements is well set to exploit the buoyancy in the industry with its expansion plans going according to schedule, he said. The company hopes to expand its capacity to 14 million tonnes by the end of 2008 from 8.9 mt now.

As a part of a Rs 1,450-crore expansion plan announced in November last year India Cements had said that its capacity would grow to 18 mt by 2009-10. Two cement plants are planned in Rajasthan and Himachal Pradesh with a total capacity of 3.5-4 million tonnes a year, along with plans for a captive power plant of about 40-50 MW and purchase of two ships of about 40,000 tonnes each to transport coal.

Feasibility studies are on for another plant in Himachal Pradesh.

In Rajasthan, work on acquisition of 200-300 acres land for the project has started with the State Government’s support, Mr Srinivasan said.

The company would take delivery of the first vessel by January end and the second in mid-March. These would contribute significantly in bringing down freight costs, he said.

Work on the two one-million tonne grinding plants at Chennai, and in Parli, Maharashtra is at an advanced stage of completion.

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